Telecom takes next step in retail rejig

By Kate McLaughlin

Friday 27th August 2004

Telecom's purchase of technology solutions company Computerland is the next step in the distribution and retail strategy changes it kicked off last December when it put its chain of business-focused retail stores up for sale.

On Wednesday Telecom bought Computerland, which has 13 branches nationwide, for $26 million.

Telecom will take a hands-off approach to the business for the next 12 months, with chief executive Chris Mackay reporting directly to Telecom's chief information officer, Mark Ratcliffe.

Ratcliffe said one of the benefits of the deal was the efficiencies gained between Computerland, and the merged Telecom Advanced Solutions and Gen-i.

Computerland provides consultation, design, development and implementation of technology solutions for corporate and medium-sized businesses.

It employs 360 staff across four locations, with another 220 in franchise operations.

The day before announcing the Computerland purchase, Telecom announced Australian retailer Leading Edge Group's purchase of Telecom's 15 business-focused retail stores for $16.4 million.

Leading Edge Group is one of Australia's largest retail investors with a network of 1300 stores and Telstra's third-largest postpaid mobile phone dealer.

It is Leading Edge's first move into the New Zealand market and Telecom said it was pleased the sale was made to a single buyer.

As part of the deal, Telecom has agreed to fit out the stores, starting with the biggest city-based ones.

Telecom retains ownership of 25 consumer-focused stores.

The recommendation to sell up most of its retail business came from former Warehouse CEO Greg Muir.

At the time Telecom said the move was consistent with global trends which recognised face-to-face service with business customers was best provided by owner-operated outlets.

The Computerland deal comes less than two months after Telecom's Gen-i buyout but Ratcliffe said Telecom is not actively pursuing any other acquisition opportunities.

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